Subsidies do not explain China’s competitiveness

Chinese firms have achieved global leadership in industries once assumed to be the preserve of advanced economies: electric vehicles, batteries, industrial robots, solar panels and artificial intelligence — to name just a few. The standard explanation for this success is that the Chinese state subsidizes production, an argument that has now been given the institutional weight of a major Organisation for Economic Co-operation and Development report. This report matters because its conclusions are likely to shape policy debates well beyond the OECD itself.